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Seattle City Council agrees to more modest pot fee hike

The existing annual license fee for marijuana will jump from $1,000 to $1,500. (AP)

SEATTLE — Backing away from a three-fold increase in pot store licensing fees, the Seattle City Council Monday unanimously approved a more modest $500 permit hike to sell legal marijuana in Seattle.

The increase – which raises the existing annual license fee to $1,500 from the current $1,000 – would apply to the existing 48 pot stores in Seattle. For out-of-town businesses selling supplies to city pot stores, the license fee will jump to $750.

Logan Bowers, owner of #hashtag pot store and president of the Cannabis Organization of Retail Establishments, said the 50 percent increase is tough but manageable.

“We’re pretty happy that the city listened to us when we pointed out that a 400-percent fee increase was too much,” Bowers said. “While we are thrilled to work with them on the issue, there still is a lot more that needs to be done.”

Councilmember Tim Burgess, who two weeks ago proposed raising the annual license fee to $3,450 – a 411-percent increase – said the council agreed to accept what Mayor Ed Murray had proposed months ago: a 50-percent hike.

Burgess said he proposed the larger fee to help offset the city’s cost of enforcing and regulating legal pot in Seattle. But, he said, the time wasn’t ripe to link license fees to the cost of regulating those businesses – yet.

“There was conversation about going higher,” Burgess said Monday of the agreement to set the fees at $1,500. “But we realized we faced a larger public policy question.”

Seattle City Council and pot shops

That larger question: Should all permit fees and licenses be calculated by the cost of regulating those businesses? That issue will be discussed by the council in 2017, Burgess said.

Bowers and Burgess both said linking fees to enforcement costs is a complicated issue. From Bowers’ point of view, the sales tax generated by a business is how a business like his pays its way. The city has pulled in an estimated $2 million in sales taxes from weed, he added.

Burgess said he understands that point. But, he said, it is a question that should be studied by city bean counters.

“That’s a big question,” he said, “whether or not the city should charge businesses the full cost of enforcement of business regulations.

“It’s very complicated.”

And, for now, off the table, much to Bowers’ relief. He said that the city could save some of the enforcement cost by finding overlaps with state inspectors. For example, he said, both city and state cannabis inspectors currently ensure the packaging is correct. He asked: Why not a single inspector?

Even so, Bowers was happy with Tuesday’s vote.

“It’s a reasonable compromise for now,” he said. “But we have more work to do.”